Coinbase is seeking approval from the U.S. Securities and Exchange Commission (SEC) to launch a stock trading service based on blockchain technology. This measure aims to reshape the traditional securities trading process through distributed ledger technology (DLT), enhance settlement efficiency and reduce operational risks.
According to informed sources, Coinbase’s plan includes tokenizing the stocks of listed companies to enable real-time trading and settlement on the blockchain. Traditional securities trading usually takes 2 to 3 working days to complete settlement, while blockchain technology can achieve near-instant delivery, reducing counterparty risks and capital occupation costs.
The exchange has submitted a relevant application to the SEC, hoping to obtain regulatory recognition for its blockchain securities platform. If approved, Coinbase will become the first major cryptocurrency exchange to offer blockchain trading of mainstream stocks. At present, the service scope it envisions may cover stocks of listed companies in the United States, but it needs to comply with the strict regulations of the SEC regarding the issuance and trading of securities.
Coinbase CEO Brian Armstrong said in a statement: “Blockchain technology has the potential to revolutionize the infrastructure of capital markets, making transactions more transparent and efficient.” We are working closely with regulatory authorities to ensure that this service complies with all compliance requirements.
This move comes against the backdrop of the SEC strengthening its regulation of the cryptocurrency industry. Since the beginning of this year, the SEC has filed lawsuits against several crypto platforms, accusing some of their tokens of being unregistered securities. Therefore, Coinbase’s application needs to clearly distinguish the regulatory classification of blockchain securities from existing crypto assets to avoid crossing the compliance red line.
Industry analysts point out that if Coinbase’s plan is implemented, it may encourage more financial institutions to explore the application of blockchain in the traditional securities sector and accelerate the digital transformation of the capital market. However, at the same time, regulatory authorities remain cautious about the applicability of blockchain technology in the securities sector, with particular attention paid to issues such as investor protection, market manipulation, and systemic risks.
The SEC has not commented on Coinbase’s application yet. According to the process, regulatory authorities may need several months to review the proposal and may require Coinbase to provide more technical details and compliance plans. If the application is approved, Coinbase will gradually pilot the relevant services under the compliance framework. Initially, only qualified institutional investors may be allowed to participate.
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